AgriCensus Report

As trade talks kick-off, Sinograin, Cofco buy more US soybeans

After much speculation, Chinese state-owned entities returned to the market on Monday to buy US soybeans, purchasing up to 25 cargoes (900,000 mt), according to several market sources.

Just hours after trade talks between US and Chinese delegates kicked off in Beijing, several sources reported between 20-25 cargoes were bought by state-owned stockpiler Sinograin and Chinese agribusiness Cofco International.

The panamax-sized vessels were bought for loading January and February out of the US Gulf and some vessels loading February and March were heard loading out of the Pacific Northwest.

“The price is estimated at 148 cents per bushel FOB US Gulf over March futures,” said one trader, equating to $394/mt.

A second source said the price for US Gulf was “150 cents per bushel” with PNW cargoes 10 cents per bushel ($3.70/mt) cheaper.

While a third source said the price paid for beans off the Pacific Northwest for February and March loading was 142 cents per bushel over March futures ($392/mt).

Cofco and Sinograin were unavailable for comment.

If true this would be the third round of buying in the past month, with estimates that between 4 and 5 million mt have now been purchased.

In July, China slapped an additional 25% import tax on US soybeans in a retaliation for US taxing some of the nation’s technology exports – effectively blocking US suppliers from the world’s number one buyer of soybeans.

But after talks between President Xi and President Trump last month at the G20 summit in Buenos Aires, President Xi pledged to buy more US agricultural goods while negotiations to find a resolution to the trade spat were ongoing.

Chinese state-owned buyers had been rumoured to be in the market last week, but with a government shutdown in the US preventing the release of export data, the market will have to wait for exact details.

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